Herbert Alexander Simon (June 15, 1916 –
February 9, 2001) was an American political scientist whose research ranged
across the fields of cognitive psychology, computer science, public administration,
economics, management, and philosophy of science sociology and a professor, most notably, at Carnegie Mellon University. With almost a thousand, often very highly cited publications, he is one of the most influential social scientists of
the 20th century.
Simon was not only a polymath, but a truly innovative thinker. He was among the founding
fathers of several of today's most important scientific domains, including artificial
Intelligence, information processing, decision-making, problem-solving, attention economics, organization theory,
complex systems, and computer simulation of scientific
discovery. He coined the terms bounded rationality and
satisficing, and was the first to analyze the architecture
of complexity and to propose a preferential attachment mechanism to explain
power law distributions.
Simon's genius and influence is evidenced by the many top-level honors he received later in
life. These include: the ACM's Turing
Award for making "basic contributions to artificial intelligence, the psychology of human cognition, and list processing." (1975); the Nobel Memorial Prize in Economics "for his pioneering research into the decision-making process
within economic organizations" (1978); the National
Medal of Science (1986); and the APA's Award for Outstanding Lifetime Contributions to Psychology (1993).
Life
Herbert Alexander Simon was born into a Jewish family in Milwaukee,
Wisconsin on June 15, 1916. His
father was an electrical engineer who had come to the United States from Germany in
1903 after earning his engineering degrees from Prague and
Cologne. His European ancestors had been piano makers,
goldsmiths, and vintners.
Herbert Simon was educated as a child in the public school system in Milwaukee where he developed an interest in science. He
found schoolwork to be interesting but rather easy. Unlike many children, Simon was exposed to the idea that human behavior could
be studied scientifically at a relatively young age due to the influence of his mother’s younger brother, Harold Merkel, who had
studied economics at the University of Wisconsin-Madison under John R.
Commons. Through his uncle’s books on economics and psychology, Simon discovered the social sciences. Simon received both his
B.A. (1936) and his Ph.D. (1943) in political science, from the University of Chicago,
where he studied under Harold Lasswell and Charles Edward Merriam.
Among his earliest influences, Simon has cited Richard Ely’s economics textbook,
Norman Angell’s The Great Illusion, and
Henry George’s Progress and Poverty.
In 1933, Simon entered the University of Chicago,
and following those early influences, he studied the social sciences and mathematics. His most important mentor at the University
was Henry Schultz who was an econometrician and mathematical economist. Eventually his
studies led him to the field of organizational decision making which would become the subject of his doctoral dissertation.
From 1939 to 1942, Simon acted as director of a research group at
the University of California, Berkeley. When the group’s grant was
exhausted, he took a position in political science at the Illinois Institute
of Technology. Back in Chicago, he began participating in the
seminars held by the staff of the Cowles Commission who at that time included Jacob
Marschak and Tjalling Koopmans. He thus began a more in-depth study of
economics in the area of institutionalism. Marschak brought Simon in to assist in
the study he was currently undertaking with Sam Schurr of the “prospective economic effects of
atomic energy”.
From 1950 to 1955, Simon studied mathematical economics and during
this time, together with David Hawkins, discovered and proved the Hawkins-Simon theorem on the “conditions for the existence of positive solution vectors for input-output
matrices." He also developed theorems on near-decomposability and aggregation. Having begun to apply these theorems to
organizations, Simon determined around 1954 that the best way to study problem-solving was to
simulate it with computer programs, which led to his interest in computer simulation of human cognition.
Contributions
Simon was a pioneer in the field of artificial intelligence, creating with
Allen Newell the Logic Theory Machine
(1956) and the General Problem Solver (GPS)
(1957) programs. GPS was possibly the first method of separating problem solving strategy from
information about particular problems. Both programs were developed using the Information Processing Language (IPL) (1956) developed by
Newell, Cliff Shaw and Simon. Donald Knuth mentions (in
Volume 1 of The Art of Computer Programming) the development of
list processing in IPL with the linked list originally called "NSS memory" for its
inventors.
Simon also collaborated with James G. March on several works in organization theory.
With Allen Newell, Simon developed a theory for the
simulation of human problem solving behavior using
production rules (Allen Newell and Herbert A. Simon, Human Problem Solving, 1972). The study of
human problem solving required new kinds of human measurements and, with
Anders Ericsson, Simon developed the experimental technique of verbal protocol analysis
(K. A. Ericsson and H. A. Simon, Protocol Analysis: Verbal Reports as Data, 1993). Simon was
interested in the role of knowledge in expertise. He said that to become an expert required about 10 years of experience and he
and colleagues estimated that expertise was the result of learning roughly 50,000 chunks of information. A chess expert was said to have learned about 50,000 chunks or chess position patterns. (Chase and Simon. Perception in
Chess. Cognitive Psychology Volume 4, 1973.)
Simon was also interested in how humans learn and, with Edward Feigenbaum, he
developed the EPAM (Elementary Perceiver and Memorizer) theory, one of the first theories of
learning to be implemented as a computer program. EPAM was able to explain a large number of
phenomena in the field of verbal learning (Feigenbaum, E. A., & Simon, H. A. (1984). EPAM-like models of recognition and
learning. Cognitive Science, 8, 305-336.) Later versions of the model were applied to concept
formation and the acquisition of expertise.
He was awarded the ACM's A.M.
Turing Award along with Allen Newell in 1975. "In
joint scientific efforts extending over twenty years, initially in collaboration with J. C. (Cliff)
Shaw at the RAND Corporation, and subsequentially with numerous faculty and
student colleagues at Carnegie Mellon University, they have made basic
contributions to artificial intelligence, the psychology of human cognition, and list processing."
While living in Pittsburgh, PA, he advised the citizenry on various issues
including the use of public funds to build stadiums and the method of raising tax revenue. Simon emphasized the usefulness of the
land tax, reflecting the early influence of Henry
George on his economic thought.
Contributions to economics
Herbert Simon has been credited for revolutionary changes in microeconomics. He is responsible for the concept of
organizational decision-making as it is known today. He was also the first to discuss this concept in terms of uncertainty; i.e.
it is impossible to have perfect and complete information at any given time to make a decision. While this notion was not
entirely new, Simon is best known for its origination. It was in this area that he was awarded the Nobel Prize in 1978.
At the Cowles Commission, Simon’s main goal was to link economic theory to
mathematics and statistics. His main contributions were to the fields of general equilibrium and econometrics. He was greatly
influenced by the marginalist debate that began in the 1930s. The popular work of the time argued that it was not empirically
apparent that entrepreneurs needed to follow the marginalist principles of profit-maximization/cost-minimization in running
organizations. The argument went on to note that profit-maximization was not accomplished, in part, because of the lack of
complete information. In decision-making, Simon believed that agents face uncertainty about the future and costs in acquiring
information in the present. These factors limit the extent to which agents can make a fully rational decision, thus they possess
only “bounded rationality” and must make decisions by “satisficing,” or choosing that which might not be optimal but which will
make them happy enough.
Simon was known for his research on industrial organization. He determined that the internal organization of firms and the
external business decisions thereof did not conform to the Neoclassical theories of “rational” decision-making. Simon wrote many
articles on the topic over the course of his life mainly focusing on the issue of decision-making within the behavior of what he
termed “bounded rationality.” “Rational behavior, in economics, means that individuals maximizes his utility function under the
constraints they face (e.g., their budget constraint, limited choices, ...) in pursuit of their self-interest. This is reflected
in the theory of subjective expected utility. The term bounded rationality
is used to designate rational choice that takes into account the cognitive limitations of both knowledge and cognitive capacity.
Bounded rationality is a central theme in behavioral economics. It is concerned with the ways in which the actual decision-making
process influences decisions. Theories of bounded rationality relax one or more assumptions of standard expected utility
theory”.
Simon determined that the best way to study these areas was through computer simulation modeling. As such, he developed an
interest in computer science. Herbert Simon's main interests in computer science were in artificial intelligence, human-computer
interaction, principles of the organization of humans and machines as information processing systems, the use of computers to
study (by modeling) philosophical problems of the nature of intelligence and of epistemology, and the social implications of
computer technology. Some of Simon's economic research was directed toward understanding technological change in general and the
information processing revolution in particular.
Studying decision-making
Administrative Behavior1was Herbert Simon’s doctoral dissertation and his first book. It served as the
foundation for his life's work. The centerpiece of this book is the behavioral and cognitive processes of making rational human
choices, that is, decisions. An operational administrative decision should be correct and efficient, and it must be practical to
implement with a set of coordinated means.
Any decision involves a choice selected from a number of alternatives, directed toward an organizational goal or subgoal.
Realistic options will have real consequences consisting of personnel actions or non-actions modified by environmental facts and
values. In actual practice, some of the alternatives may be conscious or unconscious; some of the consequences may be unintended
as well as intended; and some of the means and ends may be imperfectly differentiated, incompletely related, or poorly
detailed.
The task of rational decision making is to select the alternative that results in the more preferred set of all the possible
consequences. This task can be divided into three required steps: (1) the identification and listing of all the alternatives; (2)
the determination of all the consequences resulting from each of the alternatives; and (3) the comparison of the accuracy and
efficiency of each of these sets of consequences.² Any given individual or organization attempting to implement this model in a
real situation would be unable to comply with the three requirements. It is highly improbable that one could know all the
alternatives, or all the consequences that follow each alternative.
The question here is: given the inevitable limits on rational decision making, what other techniques or behavioral processes
can a person or organization bring to bear to achieve approximately the best result? Simon writes:“The human being striving for
rationality and restricted within the limits of his knowledge has developed some working procedures that partially overcome these
difficulties. These procedures consist in assuming that he can isolate from the rest of the world a closed system containing a
limited number of variables and a limited range of consequences.”³
Administrative Behavior, as a text, addresses a wide range of human behaviors, cognitive abilities, management techniques,
personnel policies, training goals and procedures, specialized roles, criteria for evaluation of accuracy and efficiency, and all
of the ramifications of communication processes. Simon is particularly interested in how these factors directly and indirectly
influence the making of decisions.
Weaving in and out of the practical functioning of all of these organizational factors are two universal elements of human
social behavior that Simon addresses in Chapter VII—The Role of Authority4, and in Chapter X—Loyalities, and
Organizational Identification.5
Authority is a well studied, primary mark of organizational behavior, and is straightforwardly defined in the organizational
context as the ability and right of an individual of higher rank to determine the decision of an individual of lower rank. The
actions, attitudes, and relationships of the dominant and subordinate individuals constitute components of role behavior that can
vary widely in form, style, and content, but do not vary in the expectation of obedience by the one of superior status, and
willingness to obey from the subordinate. Authority is highly influential on the formal structure of the organization, including
patterns of communication, sanctions, and rewards, as well as on the establishment of goals, objectives, and values of the
organization.
Decisions can be complex admixtures of facts and values. Information about facts, especially empirically proven facts or facts
derived from specialized experience, are more easily transmitted in the exercise of authority than are the expressions of values.
Simon is primarily interested in seeking identification of the individual employee with the organizational goals and values.
Following Lasswell6 he states that “a person identifies himself with a group when, in making a decision, he evaluates
the several alternatives of choice in terms of their consequences for the specified group”7. A person may identify
himself with any number of social, geographic, economic, racial, religious, familial, educational, gender, political, and sports
groups. Indeed, the number and variety are unlimited. The fundamental problem for organizations is to recognize that personal and
group identifications can either facilitate or obstruct correct decision making for the organization. A specific organization has
to deliberately determine and specify in appropriate detail and clear language its own goals, objectives, means, ends, and
values.
Chester Barnard pointed out that “the decisions that an individual makes as a member of an organization are quite distinct
from his personal decisions”8. Personal choices may determine whether an individual joins a particular organization,
and continue to be made in his or her extra–organizational private life. But, as a member of an organization, that individual
makes decisions not in relationship to personal needs and results, but in an impersonal sense as part of the organizational
intent, purpose, and effect. Organizational inducements, rewards, and sanctions are all designed to form, strengthen, and
maintain this identification.
The correctness of decisions is measured by two major criteria: (1) adequacy of achieving the desired objective; and (2) the
efficiency with which the result was obtained. Many members of the organization may focus on adequacy, but the overall
administrative management must pay particular attention to the efficiency with which the desired result was obtained.
Simon's contributions to research in the area of decision-making have become increasingly mainstream in the business community
thanks to the growth of management consulting. Simon's decision-making steps of Intelligence, Design, Choice, and Review are the
basis of the work of Inferential Focus.
Notes
- 1.Simon, Herbert,Administrative Behavior, The Free Press, New York. 1976, 3rd. ed. 364pp
- 2.Simon, op.cit.p 67
- 3.Simon, op.cit.p.82
- 4.Simon, op.cit.p.123-153
- 5.Simon, op.cit.p.198-216
- 6.Lasswell, H.D., World Politics and Personal Insecurity New York: Whittlesey House,1935 pp.29-51,cited by Simon, in
op.cit.p.205
- 7.Simon,in op.cit.p205
- 8.Barnard, C.I, The Functions of the Executive Cambridge: Harvard University Press,1938 p77, cited by Simon in op.cit.
p202-203
Interesting quotes
- Most producers are employees, not owners of the firms..... Viewed from the vantage point of classical [economic] theory,
they have no reason to maximize the profits of the firms, except to the extent that they can be controlled by owners....
Moreover, there is no difference, in this respect, among profit-making firms, non-profit organizations, and bureaucratic
organizations. All have exactly the same problem of inducing their employees to work toward the organizational goals. There is no
reason, a priori, why it should be easier (or harder) to produce this motivation in organizations aimed at maximizing profits
than in organizations with different goals. The conclusion that organizations motivated by profits will be more efficient than
other organizations does not follow the organizational economy from the neo-classical assumptions. If it is empirically true,
other axioms will have to be introduced to account for it.
- What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information
creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information
sources that might consume it. [1]
- Over Christmas, Allen Newell and I created a thinking machine. [2]
Bibliography
- 1947. Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations,
- - 4th ed. in 1997, The Free Press
- 1956, 'Reply: Surrogates for Uncertain Decision Problems'.
- - Reprinted in 1982, In: H.A. Simon, Models of Bounded Rationality, Volume 1, Economic Analysis and Public Policy, Cambridge,
Mass., MIT Press, 235-44
- 1957. Models of Man. John Wiley. Presents mathematical models of human behaviour.
- 1958 (with James G. March and the collaboration of Harold Guetzkow).
Organizations. New York: Wiley.
- 1969. The Sciences of the Artificial. MIT Press, Cambridge, Mass, 1st edition
- 1972 (with Allen Newell). Human Problem Solving.
- 1972, 'Theories of Bounded Rationality'. In: C.B. McGuire and ROY Radner teds. 1 , Decision and Organization, North-Holland
Publishing Company, 161-76
- 1977. Models of Discovery : and other topics in the methods of science. Dordrecht, Holland: Reidel.
- 1979. Models of Thought, Vols. 1 and 2. Yale University Press. His papers on human information-processing and
problem-solving.
- 1982. Models of Bounded Rationality, Vols. 1 and 2. MIT Press. His papers on economics.
- 1983. Reason in Human Affairs, Stanford University Press. A readable 115pp. book on human decision-making and
information processing, based on lectures he gave at Stanford in 1982. A popular presentation of his technical work.
- 1991. Models of My Life. Basic Books, Sloan Foundation Series. His autobiography.
- 1996. The Sciences of the Artificial, 3rd ed. MIT Press.
- 1987 (with P. Langley, G. Bradshaw, and J. Zytkow). Scientific Discovery: computational explorations of the creative
processes. MIT Press.
- 1997. An Empirically Based Microeconomics. Cambridge University Press. A compact and readable summary of his
criticisms of conventional "axiomatic" microeconomics, based on a lecture series.
- 1997. Models of Bounded Rationality, Vol. 3. MIT Press. His papers on economics since the publication of Vols. 1 and 2
in 1982. The papers grouped under the category "The Structure of Complex Systems" -- dealing with issues such as causal ordering,
decomposability, aggregation of variables, model abstraction -- are of general interest in systems modelling, not just in
economics.
- Courtois, P.J., 1977. Decomposability: queueing and computer system applications. New York: Academic Press. Courtois
was influenced by the work of Simon and Albert Ando on hierarchical nearly-decomposable
systems in economic modelling as a criterion for computer systems design, and in this book he presents the mathematical theory of
these nearly-decomposable systems in more detail than Simon and Ando do in their original papers.
References
- ^ Computers, Communications and the Public Interest, pages 40-41,
Martin Greenberger, ed., The Johns Hopkins Press, 1971.
- ^ [1]
- H. Simon, "Organizations and markets," Journal of Economic Perspectives, vol. 5, no. 2 (1991), p. 28.
External links
diq:Herbert A. Simon
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)